Each year, many
employees avail themselves of their right to file a complaint with the Commission des normes, de l'équité, de
la santé et de la sécurité du travail (the "CNESST"),
alleging that they have been dismissed without a good and sufficient cause. The
Act Respecting Labour
Standards (the "Act") provides that "senior
managerial personnel" may not avail themselves of this recourse. The case
law is replete with examples of employers attempting to invoke that exception
to the Act, in order to seek the dismissal of complaints for dismissal without
a good and sufficient cause filed by employees they consider to belong to
"senior managerial personnel".

In June 2017,
the Court of Appeal rendered an interesting decision confirming and also specifying
the criteria to be considered in determining whether an employee is, or is not,
considered "senior managerial personnel,” within the meaning of the Act.

Facts

Blinds To Go
(the "Employer") is a company specializing in the manufacture of
made-to-measure products within short timeframes. To carry out its operations
effectively, it owns two manufacturing plants, as well as hundreds of retail
stores, where customers can place orders. As soon as a product is ordered, it
is manufactured in one of those two factories, and delivered to the customer
within a maximum period of 48 hours. Mr. Roberto Delgadillo was hired as
manager of one of those manufacturing plants — factories that the Court of
Appeal held to be a "nerve-centre of the business1,” having
regard to the Employer's specific operations.

Following his
dismissal, Mr. Delgadillo filed a complaint under the Act, alleging that he had
been dismissed without a good and sufficient cause. The employer applied to
have the complaint dismissed, on the ground that Mr. Delgadillo, considered as
"senior managerial personnel,” could not benefit from any such legal
recourse.

History
of the Case

On July 5,
2013, the Commission des
relations du travail (the "CRT"), which has now become
the Tribunal administratif du
travail (or the "TAT"), rendered a first decision,
concluding that Mr. Delgadillo was not
a senior manager, and therefore that the Employer's preliminary objection was
to be dismissed2. Essentially, the CRT held that Mr. Delgadillo had
no right to oversee the whole
of the company's operations, but only those of a single department, however important that
department was3. Subsequently, on August 18, 2014, the CRT allowed
Mr. Delgadillo's complaint, finding that his dismissal was unjustified4.

The Employer then
applied for judicial review of both decisions of the CRT. Applying the standard
of correctness to both decisions, the Superior Court rendered a judgment on
December 16, 2015, quashing the CRT's decisions and holding that, in fact, Mr.
Delgadillo was a
senior manager within the meaning of the Act5.

Mr. Delgadillo
obtained leave to appeal the Superior Court's decision on February 9, 20166,
whence the proceedings before the Court of Appeal and the decision summarized
here.

The
Court of Appeal's Decision

After finding
that the applicable standard of review of the CRT's two decisions was
reasonableness, rather than correctness (which the Superior Court had applied
at the judicial review stage), the Court of Appeal examined whether the CRT's
two decisions were in fact "reasonable" under the circumstances.

The Court of
Appeal concluded that the CRT had committed two fatal errors in its reasoning.

On the one
hand, the Court of Appeal held that the CRT had totally ignored the particular
nature of the business, the context, as well as the position occupied by Mr.
Delgadillo, and had thus rendered a decision which did not fall within a range
of possible outcomes in light of the applicable law and was unacceptable as
regards the facts.

On the other
hand, the Court of Appeal recalled that although the concept of "senior
managerial personnel" within the meaning of the Act must be interpreted
restrictively, it could not be given so narrow a meaning as to apply
exclusively to persons occupying the position of president of a company.

In that
context, the Court of Appeal concluded that Mr. Delgadillo was a senior
manager, within the meaning of the Act, summarizing the facts underpinning that
conclusion as follows:

The relationship of
trust and the close connections between Mr. Delgadillo and the owners of
the company;

Mr. Delgadillo's
important duties in the company;

The vast latitude
granted to Mr. Delgadillo in the performance of his duties;

The fact that Mr.
Delgadillo was active at the highest levels of the company;

The fact that Mr.
Delgadillo reported only to the president or the vice-president, in
addition to the fact that he could contact them directly, without going
through any intermediary, and that he discussed matters with them almost
on a footing of equality;

Mr. Delgadillo's
generous working conditions (including his salary, which could be as high
as $375,000, one of the highest in the company);

Mr. Delgadillo's
participation in setting company strategies and policies.

It is
interesting to note that the Court of Appeal found that Mr. Delgadillo had
"senior managerial personnel" status, despite the fact that his
authority extended only to the one plant that he managed. In so concluding, the
Court of Appeal appears to have taken account of the fact that Mr. Delgadillo
was required to cooperate with the managers of other departments in that same
factory, and therefore that he in fact ensured the management of all of its
operations. That he had no power of veto was not considered to be a determining
factor by the Court of Appeal.

Conclusions

The Delgadillo case confirms and
re-applies the usual criteria applicable by the TAT (formerly the CRT)7
for determining "senior managerial personnel" status, and further
reiterates the point that the facts of each case must always be considered in
determining the status of a complainant. In particular, the decision reaffirms
the importance of considering the specific
context of the company in undertaking that analysis.

That being
said, we believe that the Delgadillo
decision could well lead the TAT to revisit the previously established case law
and potentially to view certain executives who have departmental, functional,
divisional, regional or "consulting" authority as belonging to
"senior managerial personnel" within the meaning of the Act, having
regard, of course, to the context of each case. The premise that someone
responsible for just one department cannot be a senior manager must therefore
be set aside definitively.

Obviously, we
are of the view that not all plant managers, or all managers of departments,
can qualify to be recognized as "senior managerial personnel" by the
TAT. The very specific context of this case was mentioned several times by the
Court of Appeal itself and so the precedent must be used with prudence.

One thing is
certain, however: it is no longer only the "top managers" of
companies who can be considered to be "senior managerial personnel"
within the meaning of the Act.

7 To wit: (1) the
hierarchical position of the employee, (2) the personnel management of the
employee whose status is contested, (3) the employee's relationships with the
owner, (4) the employee's working conditions, as well as his/her arrival and
progression within the company, (5) the employee's participation in management,
the development of policy decisions of the company, etc. and (6) the enjoyment
of great autonomy, important discretion and significant decision-making power.
See, for example: Commission
des normes du travail c. Beaulieu¸ [2001] R.J.D.T. 10 (CA) at
paras. 21 et seq.

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.

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